Minnesota Management and Budget presented their February forecast this week, which estimates a $1.513 billion budgetary balance, most of which is one-time spending. This balance is $181 million more than the November 2019 forecast. Minnesota’s economic outlook is stable, but a slowdown remains in the forecast. The small budgetary improvement continues into the next biennium and the structural balance is improved, but budget challenges remain.
Most of this supplemental budgetary balance is not available for ongoing spending. While a positive budgetary balance is always good news, the small increase does not change the fact that future budget challenges remain, and we will not let poor budgeting decisions jeopardize Minnesota’s economic future.
A balanced budget with fiscal stability protects Minnesota’s economy. With federal uncertainty, the huge drop in the stock market this week, and slowing economic growth, we need to be careful to balance any new permanent spending with new revenue in order to protect our economy and quality of life from future instability. That’s why the Senate Republican plan to spend more than $1 billion of the surplus on tax cuts is irresponsible. It isn’t one-time spending; this tax spending cut will cost billions in the out-years and likely drive us back into budget deficits. With the forecast’s cautions about a potential economic downturn and the cost of inflation, it would be highly irresponsible to use this one-time surplus on the Senate Republicans’ expensive and reckless tax spending plan.
The Minnesota Senate DFL is committed to shoring up our budget reserves and working together to build the state all Minnesotans deserve, with high-quality education, affordable and accessible health and care, and increasing support for working families. The values we share bring our communities together and serve as a guide for how we make our state work better for all of us, no matter what we look like or where we come from.
We owe it to Minnesota’s students, seniors, working families, and farmers across the state to talk about what matters to them: tuition costs, property tax relief, the insulin crisis, childcare, and broadband. The supplemental budget gives us a real opportunity to use the funds for one-time spending in strategic investments across our state.